Cancelation of Prepayment Tax Invoice

XML and business rules
1

Hi,

My customer recently generated an e-invoice for a prepayment voucher but inadvertently provided an incorrect Buyer’s VRN (VAT Registration Number). As a result, they now wish to cancel the generated prepayment tax invoice and issue a new one with the correct VRN.

Please guide the steps to cancel the prepayment tax invoice on the ZATCA portal.

@Ankit_Tiwari Your insights and assistance in this matter would be greatly appreciated.

2

@shivangi.garg , you can reverse the transaction by passing credit note with exactly same content as that of the invoice (including prepayment adjustment related lines).

4

in this case ,you should consider the prepayment as a normal Tax invoice and you are making return for it (credit note). you will mention the Prepayment in the header of the invoice only

5

Hi @Ankit_Tiwari
Thank you for your response. I understand that we need to generate a credit note against the prepayment voucher to cancel it. However, from an accounting perspective,

  • Buyer has credit balance in case of prepaid amount
  • Buyer has debit balance in case of sales transaction
  • Buyer has credit balance in case of credit note

In the case of sales transactions, the buyer typically has a debit balance, making it straightforward to settle the credit balance of the prepayment with the debit balance of the sales transaction.

However, when we issue a credit note against the prepayment voucher, the buyer ends up with a credit balance. In this scenario, I’m unsure of how we can settle the credit balance of the prepayment amount with the credit balance of the credit note.

6

Normal Credit note to be Issued to cancel the prepayment invoice
in Credit note: you will mention …BillingRefernce = prepayment invoice

7

@Embro thanks for the response. So, does a normal credit note mean no need to generate e-Invoice?

8

sure you must issue E-Invoice … Type is …Creadit note
by the value of the balance of the prepayment.

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